Tuesday, January 31, 2012

We're releasing a number of small improvements at the moment - watch this space. Today's addition is a button to reverse the order of Forms. Currently, the oldest ones show first, but we can see why you'd want the newest ones at the top.

Can anyone help Rozanne? She contacted us recently after reading the article about the Green Deal. My experience of electric boiler is non existent. Maybe other landlords have come across them in their travels and could point her in the right direction?

"Thank you for this information which is interesting. One issue which I think might be linked to this is the latest requirement for gas fired boiler flues to have an inspection hatch within 1.5 metres of any join. This has to be in place by the end of 2012 and will be part of all future gas boiler servicing. Any boiler not found to be compliant by the end of this year will be condemned. My research has shown that to satisfy this new requirement could cost up to £1,000 and result in unsightly inspection hatches in the ceiling of rooms through which the flue goes. As a result I am inclined to switch from gas fired boilers in my rental flats to electric boilers as these have the added benefit of not needing annual safety inspections and certificates. I wonder how the Green Deal mentioned in your article will affect this? I have found it quite difficult to find impartial advice on which electric boiler to fit and if you are aware of any source of this information I should be most grateful to have it."Landlord insurance - market beating rates

Brighton landlords may have to pay £700 for a landlord licence on student houses.

The council says that it would help manage the problems of late night noise in student areas if they are provided good quality housing?Because? Because if you have a nice house as a student you're less likely to go out drinking? Obviously Brightons local councilors never went to university, well butchers don't I suppose, aren't most councilors aged butchers?Now don't we all know the true reason, it's a good way of raising extra cash without effecting your local vote popularity. Lets face it students won't vote in the council elections and most landlords don't vote at all, as that would involve recognising that they are answerable to 'the man'.

The Council leader Bill Randall (I'm not sure if he's a butcher or retired butcher) said: "This would benefit the community where it's about the litter and the noise from student houses." WHY?

David Cichon, local student president said that costs for licensing would just be passed on to students.

Yes of course David, but local councilors don't care because you're not local and none of you will vote in the local elections anyway. Just put it on your student loans and move on off to London when you've finished your studies. Feel free to move back when you've finished with the late night partying. Maybe when you've got young children.

David goes on to say "It will decrease the quality of housing and increase the price of housing for students in Brighton." So, just give us the £700 so we can spend it on the locals.

Landlord licences, a great way for local councils to raise cash in times of austerity without upsetting the local voters.

Thursday, January 26, 2012

We have plenty of really useful comments about ways to improve the upgraded version of the Property Manager for landlords PM3.0. You only have to look at the comments section housed within our FREE online software to know that there are plenty of landlords actively using the software to manage their property portfolios.

I have one suggestion myself. Having just completed my tax return and having used the PM3.0 to calculate my rental profits from my portfolio. I was left thinking it would have been useful for the software to be able to format and print the information including the expenses and rental income contained in the tax summary screen in adobe? Perhaps I'm the only one who thinks this. Let me know...

The average rent in England and Wales fell by 0.8% to £711 per month during December according to LSL Property Services, following a small fall in November.

The figures tally with Rent Index figures which show a fall of 2.45% over the last 3 months.

This comes as no surprise to landlords as December is traditionally a difficult month for letting.

"Rents dipped again in December, but the drop-off was much smaller than a year ago" said David Brown, commercial director of LSL Property Services.

"The rental market was sheltered from the full impact of the seasonal lull by the strength of underlying tenant demand as many prospective renters took the opportunity to move in the run-up to Christmas at a time when the market is traditionally less competitive."

According to SearchFlow, a property information firm, billions of pounds worth of property is at risk of being left un-insured as the rules on flood insurance change.

Currently, the government’s “statement of principles” agreement means that up until June 30th 2013 insurance providers must continue to cover properties that are at risk of flooding, but even so, from June onwards this year, it is expected that many insurers will be severely raising their premiums for flood risk properties or just completely refusing to cover those types of property.

This is expected to have huge ramifications for not just homeowners but also business owners with a premises at risk of flooding and also commercial property owners who may find that their landlords insurance renewals do not cover flood damage anymore.

When asked about the situation, Richard Hinton, Business Development Director at SearchFlow, said “Although buyers will be able to obtain flood insurance for the next few months, the long-term prospects of properties at risk of flooding are potentially bleak.”

He went onto say that the situation was especially bad news “for buyers purchasing in high-risk flood areas, the possibility of very high premiums, significant reductions in value, less access to mortgage finance – even action taken by the mortgage lender due to breach of the mortgage agreement – is high.”

Tuesday, January 24, 2012

The 'usual questionable data monkeys' have their statistical evidence regurgitated in the form of a Daily Mail article. This time its a 'BTL set to boom' angled piece, next week it could be a 'BTL set to crumble rant' depending on which way the journalist has their chair swiveled.

I've just been calculating my tax return for 2010/2011 using Property Hawks PM3.0. A great improvement on PM2.0 in my humble opinion.

One of the additional features on PM3.0 shows that there is an almost 4:1 split on my expenses between finance and maintenance. The vast majority of my expenses are still interest charges despite the historically low interest rate. Interesting!

Sunday, January 22, 2012

The Financial Times highlighted at the weekend the importance of buy-to-let rental yields in obtaining the best rates on buy-to-let finance and also the highest loan to value (LTV). This is because most buy-to-let lenders look at rental cover when accessing the acceptability of the loan. Rental cover is the amount of rent received or projected to be received compared to the size of the proposed mortgage payments.

The higher the gross rental yield the more scope a landlord has to gear up their investment with a larger mortgage and a smaller deposit.Mortgage search - 80% LTV

Friday, January 20, 2012

Latest poll figures from website Spareroom reveals that almost 9 out of 10 landlords have had problems with tenants on benefit.

The poll indicated that 87% of landlords who accept housing benefit tenants have had issues with rent not being paid on time, with one in ten (11%) saying they have had tenants who stopped paying their rent altogether.

A warning? Perhaps. A lot of landlords who are prepared to manage their LHA tenants carefully make a damn good living out of renting to people on benefits. The secret is that you need to manage your tenants more actively especially at the beginning to ensure the tenancy proceeds smoothly in the long run.Landlord Insurance - professional cover available

Thursday, January 19, 2012

Landlords have told us that the system is excellent - big improvement on PM2 and much easier than the previous version. It's very easy to navigate using the site map and has a better layout. Above all, we've not had any reports of problems that weren't easy to fix.

We're now recommending the new version over the older PM2 version. All the data is shared, so you can use either version, even swapping back and forth between them. Not everyone likes the change, so for them we've kept PM2 live.

Shelter's advice line saw a 40 per cent rise in calls about rent deposit issues last year .

It hopes that new laws on tenancy deposit schemes, will help when they are introduced later this year.

The new changes will mean that tenants will still be able to make a claim against their landlord after their tenancy ends, it will also block the loop hole that allowed landlords who were prosecuted for not placing a deposit in any of the registered schemes to sign up posthumously before the case comes to court, which did seem rather ridiculous.

Sunday, January 15, 2012

2011 was a good year for the BTL mortgage market with an increase in the number of lenders and products available bringing more competition, wider choice and better deals for landlords.

Kent Reliance re-launched into the buy-to-let market in 2011 through a restricted number of distributors. It is currently offering a range of competitive landlord mortgages via four selected intermediaries only, including the provider of Property Hawk Mortgages. The core product range includes a 4.19 per cent 2 year fixed rate up to 75 per cent LTV with a 2.5 per cent fee and is also available on houses in multiple occupation, limited companies, student lets and freehold units split into flats.

Kent Reliance also launched an 85 per cent LTV product – 5.99 per cent fixed for 2 years with a 1 per cent fee – available from a limited tranche of funds and accessed via its selected distributors only.

There are also some very attractive rates currently available from regional building societies such as Leeds, Hinckley & Rugby and Saffron.

There has been an increase in the number of products with incentives such as free valuations, free legal fees, no early repayment charges or no completion fee. The remortgage market is also showing signs of improvement with more options available – good for those existing landlords looking to release equity to expand their portfolios.

Whilst growth in the market has been steady over the last twelve months it is still the case that the demand for buy-to-let mortgages in the UK outstrips supply, and further product innovation is required to support residential property investors during the year ahead.

The eurozone crisis has added extra pressure to the already fragile financial markets and it is expected that the overall mortgage market will remain flat in 2012. However, many industry experts predict that the buy-to-let sector will continue to experience an increase in new lending.

As UK banks await the outcome in Europe, it is likely that the uplift in buy-to-let business next year will be driven by existing specialist lenders and regional building societies which have demonstrated a healthy appetite to lend to landlords.

However, there could be other developments and markets can move quickly. For example, Abbey re-entered the buy-to-let market in December with a limited range of products, which could be an indicator of its desire to be a serious player in 2012.

Overall, the outlook for landlords is positive and the ability to arrange buy-to-let finance should continue to improve during 2012.

Saturday, January 14, 2012

Jeremy Corbyn (Islington North, Labour) has continued his ongoing spat with Grant Shapps.

He recently questioned the Minister of State for Housing and Local Government on whether his Department is undertaking any research on the effect of the changes in Housing Benefit rules in London and specifically:

"how many people he estimates have (a) moved and (b) been made homeless as a result of those changes."

The Minister confirmed that the Department for Work and Pensions (DWP) had commissioned an independent consortium of academics and research organisations to evaluate the effects of the recent local housing allowance changes. Many landlords have been negatively impacted on the reduction in rents paid to their tenants on benefits and will await with interest the outcome of this research.Landlord insurance - rent guarantees available

Wednesday, January 11, 2012

Landlords are required to have all gas appliances checked annually by a Gas Safety Engineer and a copy of the certificate should be handed to the tenant. Failure to do so could result in prosecution as one landlord found out.

Mr RashidHussain had failed to obtain a Gas Safety Certificate, despite numerous warnings and the Local Authority issuing an improvement notice. He was fined £10,000 and ordered to pay costs in the sum of £8,000. A lot of money when you take into account that it would have cost him less than £100 to get the checks done.

Rightly in our view rent controls would just result in a shrinking rental sector and more shortages in rental accommodation. Shapps argued that the rental controls introduced by previous Labour governments resulted in a contraction of the private renal sector by 47%.

Some people just don't learn the lessons of history though. It seems amongst them is Ken Livingstone (Red Ken) who has set out as one of his key policies in his attempt to be re-elected as London Mayor in 2013 a pledge to introduce rent controls in London.

Some would see this policy as proof that Leopards just don't change their spots!

It used to be all about capital growth, rent was there purely as a lubricant to the wheels of property price growth, to pay the mortgage whilst a property doubled it's value.

Not anymore, as most landlords can appreciate, the housing market won't be doing much for a long while. So now the focus is back on rents and with the perceived idea that these are only going to head up to meet with an increasing demand, BTL is booming again.

President of the ARLA, Tim Hyatt agrees with this current thinking, “The logic for entering the market has see-sawed from capital growth to rental income,” he also went on to say that “the average buy-to-let landlord in the UK is in the market for 16 years so the investment can weather almost any storm”.

Well rental property does seem to be able to roll with the waves, unlike some investments that just don't have that resilience in differing economic environments, dare I add buoyancy to my storm laden description.

While on the train to London I got Claire one of my more ebullient tenants on the line. She appeared almost ecstatic to deliver the news that one of my coping tiles and several smaller roof tiles had been dislodged.

I've just contacted my trusty roofer Jim who incidentally used to be a Nottingham Forest player just before its heyday in the late 70's.

Now he mends roofs.

I'm hoping that either it's cheap. Jim's normally pretty reasonable or my landlord insurance with Alan Boswell covers at least part of the cost but with an excess of £150 I'm hoping that Jim comes in at less.

Not the best start to a landlord's year but I did have a great couple of days in London - in my opinion the best capital city in the world.Landlord insurance - storm damage covered

Friday, January 06, 2012

Shelter are warning that landlords should brace themselves for a rise in rent arrears as more tenants may have taken out payday loans or other credit to cover overspending after the festive period.

If your tenant is just a month behind you should meet with them and work out a payment plan to bring the arrears up to date.

However, if your tenant falls even further behind you may wish to seek advice on what options are open to you. If you do intend to take action you must serve Notice on your tenant of your intention to seek possession.

If your tenant fails to remedy the situation you will need to issue Court proceedings and ask for a possession order.

My advice would be:-

1. when one month's rent is late approach the tenant and find out why and then try and work out a reasonable repayment schedule.

Thursday, January 05, 2012

New year and Christmas parties are now gone and it's time to return to the mess that has been left, time for the tidy up.

That goes for the property market party that many of us managed to enjoy from the late nineties through to the 2007 when last orders were rang.

We've all be suffering a dull hangover for the past four years except for some South Eastern landlords who have continued to party.

Lets just be thankful that we didn't travel over for the Irish property market party, recent survey shows that Dublin property prices are now 65 percent down from their peak, meaning that investors are probably still in casualty getting their stomach pumped. You know what the Irish are like for over indulging they really need to learn a little self restraint.

Let's us hope that 2012 continues to bring a relatively stable readjustment to UK property prices, more of a soft deflation in real terms than an outright crash.

Like a balloon slowly deflating over the week following the party than an outright pop, here's to abstinence in 2012.

Finally, YousefMohammed was fined £1000 for letting a HMO without a licence.

It would seem that Local Authorities are taking their duties seriously under the HMO requirements.

As I have advised previously, if you have a HMO or are converting a property into HMO please ensure that you contact your Local Authority to find out what the requirements are, and then ensure that you comply with these requirements.

In days gone by letting agents in most towns were a rare beast. They frequently occupied upper floors in seedy backstreets or damp back offices. No longer.

The growth in the buy-to-let market has resulted in some letting agents occupying prime spots within our towns and cities whilst traditional estate agents struggle.

A recent report illustrates the growth of the letting agent. Chelmsford in Essex (hardly an urban metropolis) now reports 44 letting agent up 50% a local paper reports. Is this growth a sign of the "fat cat" fees that some letting agents can charge or does it reflect a fundamental change in the balance between buying and renting.

These figures do ignite the debate again about letting agents. Are they unregulated vultures preying on unsuspecting landlords or do they provide a valuable service for landlords in the growing rental market.

Dickensian living is still very much alive in parts of London. The Economist describes garages with beds in and shared properties with eleven tenants to a room in the borough of Newham.

The council is attempting to crack down on rogue landlords, and have even brought cases under the Proceeds of Crime Act, originally created as a tool against drug dealers. The Act enables courts to hand out stiffer penalties including custodial sentencing.

However the continuing housing shortage is only set to get worse as the rental sector becomes increasingly reliant on a private rental sector in a time when the sector is becoming less and less attractive to an investor.

Expect conditions to become more and more Dickensian over the coming years as the crisis continues to be swept under political rugs.